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Uncertainty
clouds rosy forecasts This is because
there are still deep misgivings about the ultimate success of the
peace effort, the government's ability to push through unpalatable
economic reforms, the stability of the ruling coalition itself,
rumblings of discontent among labour unions, the uneasy 'cohabitation'
arrangement between the president and the prime minister, and the
possibility of a PA-JVP combine replacing the ruling United National
Front. There is also growing concern about the increasing number
of industries that are being closed, as banks step up efforts to
recover loans, and the sudden blackouts that seem to be plaguing
the country again, despite government assurances that there will
be no more power cuts. The UNF government
appears to be trying to create a false 'feel-good' effect, such
as the project to 'light up' Colombo, which many consider to be
misguided given the uncertain outlook for power generation and warnings
of power cuts in the future when demand outstrips supply. The unbridled
waste and corruption that seems to go on whatever government is
in power is another cause for concern. Government efforts to shed
excess labour - partly its own creation since all recent governments
stuffed state bodies with supporters of politicians - should be
extended to the excess manpower in the Cabinet, which is far out
of proportion to the country's needs and capacity. It is indeed
revolting that when the country's finances are in such dire straits
that the government should not only continue with a bloated Cabinet
but even seek to expand it. The forced
closures of industries - which seem to be on the increase going
by the parate execution advertisements - does not augur well for
the country's efforts to expand its manufacturing base and create
the jobs that are sorely required to reduce the ranks of the unemployed
and ward off possible social unrest that such idle minds could generate.
A belief has been expressed that we're becoming a nation of shopkeepers
given the closures of industries and the expansion of the services
sector. Entrepreneurs who took the risk of venturing into manufacturing
are putting up shutters and moving into trading. It is said to be
cheaper to import rather than manufacture locally. While this
country may not be able to manufacture as many products as it would
wish, given the small size of the domestic market and the difficulties
in accessing modern technology, it makes sense to try to make whatever
is possible and reduce our reliance on imports which drains valuable
foreign exchange. The efforts of successive governments to protect
and expand our manufacturing base appear to have failed. The signs of
growing JVP-inspired industrial unrest, with the former militant
group using its clout in the labour unions to disrupt business activity,
is another danger signal that the government would be ill-advised
to ignore. The corporate sector is also worried about what would happen to the peace process and the economic reforms if a PA-JVP alliance comes to power. The two parties have been making threatening noises against both these initiatives and there are genuine fears that the economic stabilisation measures and the reforms process set in motion by the UNF could be destabilised. BOI
sees surge in investments How much
investment did Sri Lanka attract last year? Last year,
according to the Central Bank, for the first six months we got $120
million worth of foreign investments. That compares with the $80
million for the full year of 2001. I think in the previous five
years from 1995 to 2000 we never exceeded about $120 million for
the whole year. For the full year last year the Central Bank is
expecting about $240 million. I think it will be higher. I was targeting
around $300 million. What about
local investments? Local investments
are difficult to quantify because we don't handle all the local
investments, particularly the expansion of some existing industries.
But I would reckon going on our numbers that local investments would
be around the same figure. In other words we are looking at somewhere
between $100 - 150 million last year. In total we would have got
around $500 million last year which is not bad. What are
the investments in the pipeline this year? This year we
are going to see a huge surge. In fact this year I am targeting
$500 million from abroad and most of that I think will come from
the field of infrastructure. Already we are finalising plans for
investments in three major sectors, in power, highways and telecommunications.
In the power sector a lot of private generation projects are already
underway. And the government is just about to award a new project
for an additional 200 megawatts of power generation. On the hydropower
side there are about five projects coming up, for hydroelectric
schemes up to about 50 megawatts each. They will also be implemented
this year. Generally one megawatt will bring in about a million
dollars. So we will get about $200 million this year just from power
alone. In relation
to highways, we hope to seal the Colombo-Katunayake expressway project
by April. The total project cost is about $137 million spread over
a period of three years. That means for this year alone we will
get around $30 million from the Colombo-Katunayake expressway. Then
the Colombo-Kandy highway has also been advertised and eleven foreign
companies have bid for that. We think that by the end of this year
we can finalise that agreement which means that around another $10
to 20 million will come in. There is much
potential for a lot of investments to come in on telecommunications.
Already Dialog GSM, which is owned by a Malaysian company, has committed
$100 million to Sri Lanka alone, of which last year they brought
$25 million, and this year I think they will bring in the balance
$75 million. The government
is also going to open up the international gateway. At the moment
the international gateway that brings all the calls into Sri Lanka
is monopolised by Sri Lanka Telecom. Last month it was advertised
for people to make bids to run separate gateways. So now we are
moving towards a multiple gateway type of situation in telecom.
So when those bidders come in I think you can see a lot of investments.
Therefore on the telecom side we can see about $100 million this
year alone. Is this
only by way of foreign investments? What about local investments
this year? Local investments
I haven't taken into account. I'm expecting $500 million from foreign
investments. The other $150 million will come in from manufacturing
projects. Prima is doubling the size of its plant in Trincomalee,
that is a major addition. Tokyo Cement is also doubling the capacity
of their cement factory in Trincomalee. Then I expect a lot of companies
here in the south to expand their production capacities. Then in
the textile sector there are about three new textile mills coming
in. The most interesting area will be tourism. We expect at least
three big hotel operators to come in this year. I think our local
investors will bring in about $200 to 300 million. There were
many BOI projects in the past which were not actually implemented.
Why is this? I would say
about 60 to 70 percent of the projects that had been approved in
January last year were not implemented. The reason was that under
the previous government they removed the powers of the BOI to give
tax incentives. We could not encourage companies to go ahead and
enjoy those benefits, so they did not make the investments. In April last
year I asked the minister to reintroduce the BOI Bill to parliament
and we got those powers back, which was a big step forward. That
cleared about 30 percent of the projects that had not been implemented.
But there still remains a hard-core of about 40 to 50 percent of
projects which are still not off the ground. The main reason was
that there are many government agencies with which we have to coordinate
to get approval, because a lot of these projects involve getting
loans. In the past the process had been very bureaucratic. Now I
have got approval from the cabinet of ministers to require any government
agency to give me an answer within two to four weeks. We have set
up a high-level facilitatory committee which would comprise of very
senior officials in the government and we'll try and expedite the
approval of these projects. This year I
want to increase the implementation of projects to about 50 percent
and that's a big leap forward. How about
investment plans in Trincomalee? Some existing
companies are expanding very aggressively. Trinco is being subject
to an overall development plan. There is a very ambitious plan to
set up a coal power plant there. A very large investor, which is
a joint venture between Indians, Germans and Scandinavians, wants
to set up a project to refine coal. That and the coal power plan
has to be accommodated in Trincomalee. Of course a
lot of tourist-related projects are also interested in coming in.
But that will be subject to a market plan. There is a very interesting
proposal from an Australian company to start a whale watching tourism
site in Trincomalee because it has a very unique harbour where whales
actually swim into the harbour. What is
the status of the plans for restructuring the BOI into five regional
commissions? The parliament
passed the Act which will give effect to the new body on the December
10. We are now in the process of recruiting high-powered chief executives
for the five commissions. They are going to be called the Regional
Economic Development Commissions. The five commissions
will be set up in five different areas in the country. The Western
province, the Southern province, the Central region, the North Central
and North Western province and finally the North and the Eastern
province. Each of those
commissions will have complete powers to plan and develop infrastructure
so that investments will flow into those regions. The five regions
will have different strengths. These commissions
are being set up so that they can coordinate the investments which
at the moment is fragmented. What is the
status of the plan to modernise the Colombo airport and the proposed
investment by a US company in air traffic control?There have been
some proposals by various companies. Airports are no longer run
by single companies. Worldwide there is a great degree of specialisation. Lockheed Martin
have come to us and said they are interested in managing our airspace.
They would prefer to come through our airspace provided we manage
that more effectively with their equipment. It is still in the proposal
stage but we are fairly confident that we will have some sort of
approval for this project in about two or three weeks' time. Then we plan
to privatise the airport itself which involves the management of
the terminals and the runway and all the infrastructure of the airport. What is the contribution or involvement of the BOI with the peace process? The contribution of the BOI to the peace process is to see that the economy revives, for peace is not something you can fill your stomach with. The government, according to the prime minister, is bankrupt. The BOI has to bring in foreign investments to fill that gap, to build our infrastructure and to set up factories. All the development activities in the countries at the moment is taking place through the BOI. Sponsorships
for weddings, birthday parties in the US In July 2001,
I watched as a couple offered up naming rights to their unborn son
on national television. The expectant parents made the rounds of
all the chat shows, inviting corporations to 'name that boy' for
a mere $500,000. Can you imagine the trauma of being introduced
in schools as Coca-Cola, or worse, Enron? Luckily for him, America's
corporations didn't bite. Sponsorships
Then there's
the case of Peter Shankman, who turned 30 in August and threw himself
a hell of a party. Shankman, CEO of the Geek Factory, a marketing
and events planning business in Manhattan, used his professional
contacts and savvy to generate about $ 15,000 in donated goods and
cash (Shankman threw in $ 14,000 of his own funds). One sponsor
paid the rental on the space, another donated food, another, vodka.
"I do public relations and marketing for a living," said
Shankman when asked to explain how he came up with idea. "I
know the movers and shakers in the industry and I knew that any
sponsor's ad or product would be seen by the right people. Every
company I contacted contributed in some way.” Changing
expectations Emerging
trends To be fair,
sponsorship can be a great thing. Where would charitable and fund
raising events be without corporate sponsors, after all? That corporations
would want to sponsor weddings and birthday parties - where they
are guaranteed a specific demographic - makes perfect sense from
a marketing perspective. My gripe is with the individuals who have
hijacked corporate sponsorships for their own gain. It's an extension
of the me-first attitude that permeates American society. It has become
acceptable to expect others to finance our lives.Many of us would
like some extra cash to raise our children, a lavish wedding or
swank New York birthday party. That doesn't mean we're entitled
to it. |
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Copyright © 2001 Wijeya Newspapers
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